By Selina Stoller, Summit Consumer Receivables Acquisitions, LLC
In May, homes were selling in record time across the United States.
The average home sold in May went under contract in just 34 days. This number broke the previous month’s record of 36 days.
Homes are selling so quickly because there are so few for sale. Recently, the number of for-sale listings was its lowest since 1999. This means fierce competition. Preferred buyers who can act quickly already have pre-approved mortgages offer larger cash down payments and have no contingencies.
- More than three-quarters of baby boomers own their own home, and 85 percent of have no plans to move.
- During the foreclosure crisis, many single-family homes were converted into rentals. Rising rental rates encourage landlords to hold onto homes.
- Many homeowners are already signed up for low mortgage rates.
- Builders are ignoring entry-level home buyers with the majority of newly built homes made as move-ups.
- Local elected officials limit the supply of homes being built into a neighborhood and make them more expensive.
While more new listings did come on the market in May – 4.3 percent more than in May 2017 – it did not help the overall supply because demand is so strong.
A shortage of listings continues to drive prices higher and creates bidding wars.
Homes sold in May went for 27.6 percent above their listing price. Some experts are concerned about price growth, and rising mortgage rates may be pushing buyers to their limit.
In this seller’s market, buyers cannot blink and have to move fast on new listings before they are gone.
- 21 Jun, 2018
- Josh Smith